Retail network shut-down hits Veikkaus revenue

23 April 2020

Finnish gambling monopoly Veikkaus has revealed that the shut-down of its retail gaming network and significantly reduced sports betting options, both due to the novel coronavirus (Covid-19) pandemic has cut revenue by around 40.6%.

However, it added, there had been little evidence of retail customers migrating to its online offering.

In the five weeks since its gaming arcades and casinos were shut and its gaming machines in retail premises taken offline from 13 March, the operator said gross revenue amounted to €95m. This represented a significant decline on the €160m projected for the five-week period.

“Under normal circumstances, the average weekly gaming revenue would have been around €30m,” chief operating officer Nora Vähävirta explained. “Now the actual revenue from those weeks was less than €20m.”

“During this period, all of Veikkaus’ slot machines and gaming venues have been closed,” she added. “[For] these five weeks, these venues would have generated approximately €60m.”

Sports betting, Vähävirta noted, was also struggling, as a result of the cancellation or suspension of leagues and competitions around the world.

Despite the land-based shut-down, Veikkaus said it had not seen a significant shift to digital play. Between March and April, while retail revenue was down by around €65m, digital revenue had only risen by around €1m above projections for the period.

“Within the digital channel […] betting revenue is €4.5m below expectations, lottery games are up by €4.0m, and casino games by €1.5m,” Vähävirta said. “For lottery, this growth is largely due to large jackpots for the Lotto and Eurojackpot games.

“Those who gambled in retail premises are not making any significant shift online.”

However, she added, the five-week period was too short a time to draw any far-reaching conclusions about changes in customer behaviour, especially as a result of the exceptional circumstances.

Since the lockdown began, Veikkaus has seen an average of 3,000 registrations per week for its online offering, up from an average of 2,000 weekly sign-ups before social distancing measures were put into effect.

However, average consumer spending has remained unchanged in this period.

Despite there being little evidence of an uptick in igaming activity, Vähävirta said it was still especially important to provide customers with safeguards to ensure they gamble sustainably. This, she explained, make its mandatory deposit limits and mandatory loss limits for faster-paced products such as slots all the more important.

There is currently no date set for the reopening of the operator’s retail network, after the shut-down was extended indefinitely, having originally been set to end on 31 March.

Last week Veikkaus announced that it was to begin negotiations over temporary layoffs at its Casino Helsinki property and the Feel Vegas and Pelaamo arcade chains. The furloughs are expected to last for around 90 days, beginning from May.